This time around,the market and the economy are entering fall from a position of strength. The S&P 500 climbed to an all-time high on Friday, leaving it just 4% away from 3,000. The Dow isn't far from its first record since late January.

But just below the surface, obstacles abound.

The biggest source of turbulence this year is the one with the potential to cause a recession: the trade war between the United States and China. Trump imposed 25% tariffs last week on another $16 billion of Chinese goods -- and Beijing immediately retaliated.

Washington has vowed to move forward with tariffs on another $200 billion of goods. China has said it would hit back -- but it's running out of American imports to tax.

The good news is that both sides are talking, leaving hope of a breakthrough. China's Commerce Ministry said on Friday that talks held in Washington last week were "constructive and candid" and both sides will stay in touch.

"Trade wars are so mutually destructive," said David Kelly, chief global strategist at JPMorgan Funds, "that political pressure should eventually result in deals."

Recession warning flashing yellow

The trade fight threatens to heat up inflation while simultaneously slowing growth, muddying the picture for the Federal Reserve.

Even though the US economy is strong, Powell is surely aware of the yellow lights flashing in Wall Street's favorite recession indicator. The yield curve, the difference between the two-year and 10-year Treasury rates, hit a post-financial-crisis low last week.

The flattening yield curve signals concern that the Fed may be raising rates too quickly. Before almost every recession, the yield curve has inverted, meaning short-term rates are higher than long-term ones.

Meanwhile, the Trump administration's oil sanctions on Iran are scheduled to go into effect in early November. The loss of barrels from the world's fifth-biggest crude producer will put further pressure on the already thin oil market. OPEC could be forced to act when it meets in Vienna in early December.

And then there's politics -- which, as 2016 showed, is the ultimate wild card.

No one knows exactly how Trump's legal turmoil will affect the midterms. But recent polls suggest Democrats have a good shot at retaking the House. That raises the specter of impeachment proceedings against Trump.

Trump has warned his impeachment would "crash" the market. While a crash seems far-fetched, impeachment talk is yet another obstacle in the road ahead.

2. Economy watch: The government releases its second estimate for second-quarter economic growth on Wednesday. The first reading showed a 4.1% growth rate, the best in four years. President Donald Trump boasted of a historic "economic turnaround" -- a claim that requires context.

4. Whiskey woes: Jack Daniel's owner Brown-Forman(BFA) reports earnings on Wednesday. The company has said it could be hurt by the trade war and retaliatory tariffs from the EU on bourbon and other alcoholic beverages.